A lucrative contract for Canadian troop support has been awarded to a joint venture company partly owned by a division of SNC-Lavalin Group that is banned from bidding on aid contracts by the World Bank.

OTTAWA—A lucrative contract for Canadian troop support has been awarded to a joint venture company partly owned by a division of SNC-Lavalin Group that is banned from bidding on aid contracts by the World Bank.

Prime Minister Stephen Harper’s government has issued a defence contract worth up to $400 million to SNC-Lavalin PAE Inc., just months after SNC-Lavalin’s parent company in Montreal agreed to a 10-year ban on World Bank contracts for more than 100 of its affiliates.

Shortly after the ban was announced in April, officials with the Canadian International Development Agency said any corporations facing sanctions from development organizations because of alleged bribery or corruption could not bid on Ottawa’s aid contracts.

But last week the federal public works department awarded a valued defence contract to SNC-Lavalin PAE to provide communications, equipment, food, water supply and other military logistics for Canadian troops operating overseas. The five-year Canadian Forces Contractor Augmentation Program (CANCAP) contract can be extended to 10 years.

SNC-Lavalin’s website shows that SNC-Lavalin PAE Inc., is a joint venture of two companies. One is U.S.-based PAE Government Services Inc. and the other is SNC-Lavalin Defence Programs Inc., one of the corporations listed in the World Bank’s statement on companies “ineligible” for aid contracts from the Washington, D.C.-based international development financing agency.

Those sanctions mean SNC-Lavalin companies on the World Bank list could be shut out of bidding on Canadian aid projects, a spokesperson for the department of Foreign Affairs, Trade and Development (DFATD) confirmed.

“Firms or individuals who have been sanctioned by a development organization, including the World Bank, for engaging in corrupt or fraudulent practices, will be ineligible to bid on projects funded by DFATD,” Nicolas Doire said in an email.

He said the department’s request for proposal documents stipulates that bidders prove they are not under sanction by a government or development organization providing assistance.

But those potential restrictions don’t apparently extend to Public Works, which said it bars only individuals, companies, board members and affiliated companies convicted of offences under its own “integrity provisions.”

“In addition, by submitting a bid, the bidder certifies that neither they nor the active members of their board of directors nor their affiliates have ever been convicted of an offence under (Public Work’s) integrity provisions,” the department said in an email to the Star.

The department said the CANCAP contract to SNC-Lavalin was the result of a “fair, open and transparent” process.

A business source said that at least one other Canadian firm bid for the contract. SNC-Lavalin PAE Inc. had held the first CANCAP contract, a 10-year deal providing logistical support to Canadian troops operating overseas.

Leslie Quinton, spokeswoman for parent company SNC-Lavalin Group Inc., said the Montreal engineering giant has never been “banned” from Canadian aid contracts.

“If we were to apply for another (Canadian aid) contract — which we would not, since they changed their criteria two years ago — we would have to declare that there were sanctions against us but we would also be permitted to explain the steps we have taken to deal with this situation,” Quinton said in an email.

“We feel, as do third-party experts, that we have made excellent progress in developing a compliance and ethics environment of world-class standards,” Quinton said. “We are pleased and proud to have been able to demonstrate this progress to our many clients and while it has not been easy, our efforts will be worth it in the end to earn and keep their confidence.”

Yet even before this most recent contract, the Conservatives were facing questions from NDP MPs asking why other departments were still allowing SNC-Lavalin to bid on government work.

“Public Works can keep doing business with SNC-Lavalin, whereas CIDA and the World Bank have banned the company from bidding on their projects,” he said in the Commons in April.

In April, the World Bank barred SNC-Lavalin Inc. and dozens of its affiliate companies from bidding on development projects until 2023 in the wake of allegations of bribery.

The remainder of the SNC-Lavalin Group is allowed to do business.

The World Bank says the misconduct involved allegations of bribery schemes involving SNC-Lavalin Inc. officials in Bangladesh. During their investigation, World Bank staff say they learned of alleged “misconduct” by the company in a project in Cambodia.

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